France's highest court had already thrown out the 75% rate, and a high-level advisory council agreed.

The Socialist government on Friday said that under the decision the rate on those with incomes above one million euros (£850,000) could not exceed 60%.

French president Francois Hollande campaigned on a promise to impose the tax, despite criticism that it would do little to solve growing fiscal problems and would drive away the wealthiest citizens. The current top tax rate is 45%.

The government says it will introduce a new measure in response to the decision.